THE Queensland Government is considering wading into the $1-a-litre milk grocery wars to help the state's dairy farmers stick a logo on cartons so shoppers can support them.

Agriculture Minister Bill Byrne said he would examine the recommendation made by a parliamentary committee after it ruled laws proposed by Katter's Australian Party to establish a voluntary logo on bottles identifying the origin of milk should not pass.

MPs found the legislation, which would also confirm the farmer was paid a fair price set by government, would likely be unconstitutional as it would impose state trade barriers.

And it said the Government didn't have the capacity to set fair milk prices, nor should it.

It would also be difficult to implement the laws as supplier Parmalat, which processes half of the state's dairy production, mixes Queensland and interstate milk together.

The committee said while laws creating fair milk price logos were problematic, customers had shown they were willing to pay more to support local farmers and there was nothing to stop the industry from running with the idea.

It therefore recommended the Government investigate options for supporting the Queensland Dairyfarmers' Organisation to devise and run an industry-led marketing scheme, potentially including the use of such a logo.

"The Government will carefully consider the report and its recommendations and provide a response to those recommendations in due course," Mr Byrne said.

The committee considered the future of the state's industry against Queensland Dairyfarmers' Organisation accusations the "extremely negative" consequences of $1-per-litre milk had seen farmer numbers fall from 621 in 2010 to 429, due to poor returns.

The committee said it was hard to judge how much the supermarket price wars had ­affected farm dairy prices and farm numbers had been falling long before $1-per-litre milk.

However it found "significant power imbalances" between farmers and processors and said better farm gate prices were desirable.